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What is a “clean title?”

Fact-checked with HomeInsurance.com

A title is a record of the car’s history. It’s a legal document issued by a DMV that tells you who’s owned the vehicle, major accident reports and the vehicle’s current condition. Titles also include the car’s VIN, make and model, manufacture year and any financing information. 

If you’re shopping for a used car, pay close attention to title brands. A branded title will tell you about major damage the car has sustained in the past. But as an important distinction, a clean title doesn’t mean the car is in perfect condition.

What a clean title actually means

A clean title is the default title; all cars start out with a clean title. If a car has a clean title, it means the car has never experienced any of the circumstances that cause a title brand, such as receiving flood damage or getting totaled.

A clean title car does not mean the car has never been damaged. When a car is seriously damaged, the insurance provider may decide the repairs cost more than the car’s worth. When this happens, the insurance company might mark the car as “totaled.” 

If a car is totaled, it gets a title brand. But cars can be damaged without being totaled. If a car has sustained damage in the past that doesn’t exceed its cost, then the car can maintain its clean title. That’s why it’s important to have a reliable mechanic check the car over before you make any commitments to buy. Other vehicle reports can be obtained that offer a history of accidents, associated with the car’s VIN. 

Types of title brands

A car’s title will reflect what’s happened to the car in the past. If the title is branded, it means the car has sustained serious damage that you should carefully consider before purchasing it. A car’s title may include the following brands:

  • Salvage – The car has been totaled due to damages. Cars with salvage titles cannot be driven legally until they are rebuilt. 
  • Rebuilt – A car with a salvage title has been repaired and can be legally driven again. Rebuilt titles may also be referred to as repaired, reconditioned or reconstructed.
  • Flood/water damage – The car has significant water damage, usually from a flood event. This is important because flood damage can create electrical problems with the car, as well as other issues that are difficult to repair. 
  • Junk – The car is legally inoperable and can only be sold for parts and scrap. This can also be referred to as non-repairable. 
  • Odometer rollback – The car has a odometer that has been deemed unreliable, meaning it may have been tampered with to show a lower mileage. This can also be referred to as “True Mileage Unknown” (TMU). Car sellers must disclose TMU before the sale.
  • Lemon – This designation changes by state. Generally a lemon refers to a car that has been out of commission for 30 days or more, or a car that has had an issue repaired repeatedly without result. A lemon may also refer to car issues stemming from the manufacturer. Check the lemon law in your state.

What is title washing?

Title washing is a form of fraud. The purpose of the fraud is to hide title brands. Criminals who want to sell cars without disclosing title brands use title washing to defraud buyers. To be clear, this is illegal. 

Title washing can happen in a few different ways:

  • Title branding laws change from state-to-state. If a car is moved into a new state that doesn’t recognize a specific title brand, then it’s possible the brand could be removed from the title. 
  • A car title is a paper document. Criminals can make physical changes to the paper document that hides previous title brands so the buyer is unaware of past damage.
  • It’s possible to reapply for car titles. If information on the car’s past is withheld during the application process, then a car can lose a brand that was on the previous title. 

Although the methods for title washing differ, they are technically all forms of fraud. If you suspect title washing, you should report it to the authorities in your state. 

If you’re buying a used car, you can protect yourself from title washing by having the car checked by a mechanic who you trust. Good mechanics should be able to spot previous damage, even if it’s not listed in the title. 

Clean titles and insurance

Insurance providers generally prefer to insure cars with clean titles. If you plan to buy a car with a branded title, keep in mind that it will be more difficult to find insurance for the car. Some title brands disqualify cars from insurance. 

If you buy a car with a rebuilt title, most insurers will be happy to provide liability coverage. But you’ll probably have a hard time finding a provider who will agree to give you full coverage. 

Full coverage refers to a collection of coverages, including collision coverage and comprehensive coverage, which pay for repairs to your car if it’s damaged in a car wreck, or another event such as a natural disaster.

The reason why car insurance companies don’t like providing full coverage to cars with rebuilt titles is that the car may have major damage that already exists before the policy is in place. If the car sustains damage that’s covered by the policy, the provider may not be able to tell the difference between the new damage and what was already there.

So if you buy a car with a rebuilt title, you should keep in mind that you may only be able to find an insurer who offers liability coverage. If you buy a car with a salvage title, you won’t be able to insure it until the car is repaired and the title is changed to rebuilt. That’s because salvage cars cannot be driven legally.

The takeaway

  • A car with a clean title could still have significant damage.
  • Title washing is illegal.
  • Use a trusted mechanic to check a used car before you buy it.
  • Some insurance companies won’t insure cars with rebuilt titles. 

A clean title designation does not mean the car is in perfect or undamaged shape. A car can undergo extensive repairs and still have a clean title. The car still needs to be checked out by a mechanic before you buy it to ensure you know its full condition. And while you can find insurance for cars with title brands, it will typically be more difficult than if the car had a clean title.

Julian Dossett

Julian is a freelance writer for Coverage.com, where he writes about auto and home insurance with an eye toward consumer advocacy. His work has appeared at The Simple Dollar, Bankrate, Reviews.com, Blockchain Beach and MSN.com. He’s currently based in New Mexico.

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